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Government subsidy's merit in the eye of the beholder

Oct 18, 2002

Comedian Rodney Dangerfield has racked up a lot of mileage over the years with his hangdog lament, “I just don't get no respect.” Most farmers can relate. The national media are consistently on the farmer's case, seldom missing an opportunity to take potshots at “subsidies to wealthy farmers and corporations.”

Although he's not on my listening agenda, I'm told Rush Limbaugh delights in regularly lambasting government payments to “corporate farms,” and the New York Times, Washington Post, and other major metropolitan newspapers frequently deride ag programs as “welfare for rich farmers.” It would be churlish, I suppose, to mention — although they never do — the subsidies the nation's broadcasters (and by extension, Mr. Limbaugh and others) have enjoyed for decades through free, and in many cases monopolistic, use of the public's airwaves. Get a major market TV license and you've pretty much been given a franchise to mint money in perpetuity, thanks to Unca Sammy. And while almost yearly postage increases have gradually sapped postal subsidies to newspapers, they nonetheless for years enjoyed extremely favorable mailing rates, again thanks to government largesse. Often, companies such as the New York Times also own major TV/radio stations and cable TV systems, not only concentrating their market power and influence, but giving them a double dip as beneficiary of government assistance.

The Environmental Working Group, which has garnered tons of media attention by making public the database of government farm payment recipients, never points out that it, too, receives government benefit from its status as a non-profit organization. Earlier this year, the Internal Revenue Service was petitioned to revoke the EWG's tax-exempt status for allegedly exerting undue influence through its lobbying and political action programs. Among major contributions to the EWG was the year 2000 grant of $1.52 million by the Joyce Foundation (which also enjoys tax exempt status and has been described as “strongly anti-corporate and anti-capitalist”) “to support a concentrated program of agriculture policy reform” and, according to its IRS Form 990, “for work on the 2002 Farm Bill.”

This is only the tip of the iceberg of literally hundreds of foundations, representing billions of dollars, subsidized by the government through their tax-exempt status, and handing out grants to support all manner of causes.

Scratch any segment of the economy, from big oil to automobiles to broadcasting to newspapers to day care, and there's likely to be some form of government subsidization somewhere along the line, whether direct, through tax breaks, or some other avenue. The justification and/or “rightness” of any particular subsidy is in the eye of the recipient.

Farmers have long said they'd rather get their income from the market than through government payments. But, they find themselves playing against a stacked deck from other countries' even-higher subsidies, unfair tariffs and dumping, and Depression-era prices. So the government steps in.

What's the alternative? Let the American farmer go down the drain and send agriculture offshore, as we've done with textiles and other sectors?

Do we really want to depend on foreign agriculture for our food and fiber?